Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

A critical financial accounting skill is the ability to read, analyze, and to make actionable determinations

from any financial statement. Business leaders gain valuable information from the analysis of their financial statements, the competitors' financial statements, and comparison to industry averages.

The Situation

You are the CFO of an up-and-coming athletic company, which desires to someday become the #1
athletic company in the world. Strategically, the company uses Nike and Under Armour as their key
competitor benchmarks. Your CEO is a big believer in learning from the competition and is requesting two
things from you regarding Nike and Under Armour's most recent annual reports.

Part One: The Executive Summary

No more than 2 pages (can include an appendix with additional graphs, charts, and tables).

1) Competitor Strategies

• Identify and explain one key strategy from each company that the company explicitly
discussed in the annual report.

2) Net Income Margins

• What are the net income margins for both companies?

• How do they compare?

• Who achieves the higher net income margin? Why?

• Tip: Analyze the major cost structure line item in the income statement (COGS, SG&A,
interest, other, and taxes) as a percentage of net sales to identify reasons for better net

income margins. Identify and comment on the differences you see. You may not know

why a particular cost item like COGS is higher or lower, but your CEO only seems
interested in knowing which cost structure items are higher or lower for each company.

3) Inventory Management

• Who has more inventory in terms of days of inventory last year?

• What are their respective 3-year trends for days of inventory?

• What does FIFO/LIFO mean, and which accounting approach does each of the
companies use to value their inventory? (The accounting approach can be found in the
Notes section.)

4) Cash is King

• How much net cash from operations did each company generate last year?

• In laymen's terms, how is each company spending their cash with respect to

reinvestments in the business, changes in debt, and returning money to shareholders?

5) Liquidity

• How is the current ratio calculated?

• How do the companies compare in terms of the current ratio, and what are their respective 3-year trends?

• Does their current ratio indicate that either (or both) of these companies could go bankrupt soon? Explain

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91767272
  • Price:- $50

Priced at Now at $50, Verified Solution

Have any Question? 


Related Questions in Basic Finance

1 what changes to disaster recovery programs were being

1. What changes to disaster recovery programs were being proposed in 2009? 2. Investigate how civil defense and emergency management evolved in your state or city. Look at such factors as when it was created, its origina ...

1 why do a firms stockholders hold a valuable default

1. Why do a firm's stockholders hold a valuable "default option"? How could this option induce stockholders to employ high levels of financial leverage? 2. All else equal, which firm would face a greater level of financi ...

Evaluate studies for a report-imagine that youre the

Evaluate studies for a report:- Imagine that you're the corporate communications vice president for Harley-Davidson Motor Company. To promote motorcycle use in the United States, you're planning a communication campaign ...

1 why do savers with small amounts to invest rarely make

1. Why do savers with small amounts to invest rarely make loans directly to individuals or firms? 2. What are transactions costs? What are information costs? 3. What are financial intermediaries? Why are financial interm ...

1 discuss how any company can become an mnc what are some

1. Discuss how any company can become an MNC. What are some of the options available to companies that allow them to use international markets and locations competitively? 2. Discuss some reasons why reductions in world ...

Part i - budget variance reportintroduction delete this

Part I - Budget Variance Report Introduction (Delete this heading in your final paper.) In your opening paragraph, very briefly introduce the purpose of your paper. Recall that you will be discussing the operating budget ...

1 what advantage does drp have over a fair share method of

1. What advantage does DRP have over a fair share method of inventory deployment? 2. Discuss the importance of collaboration in the developing of supply chain inventory strategies. Provide an example. 3. Customer-based i ...

1 consider the various means comparison procedures that

1. Consider the various means comparison procedures that have been discussed in this appendix, and indicate the advantages and disadvantages of each. 2. What is the difference between exploratory factor analysis and conf ...

An article in the wall street journal discussing the fear

An article in the Wall Street Journal discussing the fear that some farmers had that regulation of derivatives would make it harder for them to hedge risk, described the situation of a feedlot owner who "uses derivatives ...

Capital-budgeting criteriathe net present value npv of a

Capital-Budgeting Criteria The net present value (NPV) of a project is a measure of the difference between the project's value and its cost. The internal rate of return (IRR) is another measure of the project's attractiv ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen